Order under Subsection 68(1) - Ling Du

Overview

The Foreign Acquisitions and Takeovers Act 1975 was enacted by the Parliament of Australia to regulate foreign acquisitions of Australian land and to provide a mechanism for the Australian Government to review and, if necessary, intervene in such acquisitions. The Act was introduced to address the need for the Commonwealth to maintain control over foreign ownership of Australian assets, ensuring that such acquisitions are in the national interest. This is particularly relevant for land, which is a significant and sensitive asset within Australia. Under the authority conferred by the Act, the Treasurer can delegate powers to make orders prohibiting or conditioning foreign acquisitions. In this instance, Kathryn Dolan, as a delegate of the Treasurer, has exercised these powers to temporarily prohibit the proposed acquisition of an interest in Australian land by Ling Du, a foreign person, in order to allow for further consideration and assessment of the acquisition’s implications for national security and other relevant factors.

Scope and Application

The Foreign Acquisitions and Takeovers Act 1975 applies to foreign persons, entities, and their interests in Australian land, businesses, and other assets. This legislation is enacted by the Commonwealth of Australia and applies nationally, thereby extending its reach to all states and territories within the country. It governs the acquisition and control of Australian entities or assets by foreign persons or entities, and also regulates takeovers of Australian companies by foreign entities. The Act applies to a broad spectrum of industries and transactions, provided they involve significant foreign interests in Australian assets. The Act does not specify exclusions, exemptions, or thresholds in the provided text but may detail these in subordinate instruments, which can extend or restrict its application further. The current order under subsection 68(1) specifically prohibits the proposed acquisition by Ling Du, a foreign person, of Australian land in Carnegie, Victoria, pending further consideration by the relevant authorities.

Key Provisions

The Foreign Acquisitions and Takeovers Act 1975 (the Act) establishes a framework for regulating foreign acquisitions of Australian land. Section 68(1) allows a delegate of the Treasurer to prohibit a proposed acquisition if certain conditions are met. In this case, section 67 provides the authority to make such an order, which is exercised to prohibit Ling Du from acquiring an interest in the Australian land situated at 20 Huntingfield Court, Carnegie, VIC, 3186. This prohibition order is in effect for a period of 90 days, starting from the day of publication in the Gazette, which in this instance is 24 December 2015. Under the Act, certain acquisitions by foreign persons require notification and possible intervention by the Treasurer. Section 68(1) specifically empowers the delegate to issue a prohibition order if it is deemed necessary to protect Australia's national security or order public credit. For Ling Du's proposed acquisition, the delegate, Kathryn Dolan, has exercised this power, resulting in the prohibition order that restricts Ling Du from completing the acquisition for the specified period. This order is a preventive measure to allow the Treasurer time to assess the potential impacts of the acquisition on national interests. The obligations imposed by the Act on parties such as Ling Du involve mandatory notification to the Treasurer before proceeding with certain acquisitions. The Act requires foreign persons to notify the Treasurer of their intention to acquire an interest in Australian land, as stipulated in section 68. This notification must include detailed information about the acquisition, allowing the Treasurer to evaluate the transaction's implications. Failure to comply with these notification requirements can lead to legal consequences, including fines and penalties under the Act. In terms of consequences for breach, the Act provides for both civil and criminal penalties. Under section 72A, a person who contravenes a prohibition order may face civil penalties, including fines up to 10,000 penalty units, or in the case of a corporation, up to 50,000 penalty units. Criminal penalties are also applicable, with individuals potentially facing imprisonment for up to five years, as outlined in section 72B. These provisions ensure that any breaches of the Act's provisions, including the prohibition orders, are met with appropriate enforcement actions to uphold the regulatory framework.